The current Chairman UK Sinha's term comes to an end in February next year.
Sebi's latest direction is against floating any new product.
The Securities and Exchange Board of India, or Sebi, on Thursday said investors will not be allowed to exit close-ended mutual fund schemes before they mature and asked fund houses to list them on stock exchanges.
Twenty-six entities, including the Tatas, Aditya Birla Group, Anil Ambani-led Reliance Capital and Religare, apart from India Post, applied. Videocon Group, later on withdrew its application.
A major payment crisis involving Rs 5,600 crore (Rs 56 billion) broke out at National Spot Exchange last year.
The Supreme Court has dismissed many petitions in the past but rarely has the country's apex court accused the petitioners of being "stool pigeons" of powerful corporate lobbies.
Though the agency did not include former Sebi chief CB Bhave and ex-member KM Abraham in the case, it recommended departmental action against the two.
The second-longest serving chairman introduced quite a few measures for the primary market and implemented a new corporate governance framework.